The strange trade was a little past 9pm on January 17th. This is a bet of $1,096,109 within two minutes of the US president being featured on a social media account that his family issued a cryptocurrency known as $Trump.
In these first few minutes, a crypto wallet with a unique identification code that starts 6QSC2CX will secure a huge load of these new tokens (5,971,750) at an opening sale price of 18 cents each, and quickly get $ Starts a surge in Trump prices reach $75 per token.
According to an analysis by the New York Times, the early trader, whose identity is unknown, walked away with two-day profits of up to $109 million.
However, the fast profits of early traders whose names are unknown but appear to be based in China, cost far more slow investors who have accumulated losses of over $2 billion. The token crashed.
As of mid-week, over 810,000 wallets had lost money in bets, according to an exam conducted by the Crypto Forensics company chain analysis for the New York Times. The total loss is almost certainly much larger. The data does not include transactions made in a series of popular crypto markets that began offering coins only after prices had already skyrocketed.
Trump priced around $17 this week, less than a quarter of its peak value of $75.
Whether people made or lost money, it was a great business for Trump. Most of them have not yet been cashed out, but they have nearly $100 million in transaction fees flowing to families and their partners, according to data from chain analysis.
President Trump sparked this scramble three days before he took office, raising a wider question about the speculative dangers of so-called memokine, a kind of cryptocurrency based on online jokes and celebrities' mascots. It caused a bust sequence. .
He promoted the coin on his social media platform, and Elon Musk's X states: “Participate in my special Trump community. Get $ Trump now.”
The series of events is not surprising, several former state and federal financial regulators said.
It is effectively part of the entire Mimecoin industry's design, legal, but rarely regulated. Trading is built on large early purchases by sophisticated traders who raise prices.
What makes this situation particularly troubling for government watchdogs and previous regulators is that while Trump is profiting from this exploitative pattern, he is moving rapidly, and some This is a sudden end to the government's crackdown on civic regulations. Agent.
“The president is taking part in a suspicious crypto scheme that harms investors, and appoints a financial regulator that will roll back the protections of victims and segregates him and his family from enforcement.” Committee Crypto advisor.
The loss of $Trump's bet was very realistic for hundreds of thousands of investors, including some who are Trump's voice supporters.
In the days before Trump was sworn in, Sean M. Whitson, 40, of Walnut Cove, North Carolina, the owner of a small computer repair business, celebrated Trump's return to the White House. . “Today, we're bringing back our country!” Whitson wrote in a photo of Trump on his inauguration day. He also expressed his hope that $Trump would raise the price.
But by the end of January, Whitson was tired of it. “I did this $Trump crap,” he wrote in a social media post. Whitson expressed his disappointment after reaching the Times on Friday. “That coin is a joke.”
Over the past six months, President Trump and his sons have made a series of aggressive forays into the crypto industry. He also helped set up a company called World Liberty Financial as Trump promoted Crypto on the campaign trail. This provided a digital currency called $WLFI to certain wealthy investors with experience in the financial markets.
Last week, Trump Media & Technology Group, the parent company of Trump's social media platform Truth Social, has moved into the financial services industry by creating a brand known as TruthFi, which offers investment products related to Bitcoin. It was announced.
Devin Nunes, the CEO of Trump Media, called the offering “a competitive alternative to awakened funds and the problem of decutting that he found across the market.”
However, the $Trump Memocoin debut was the first time the Trump family had sold new crypto tokens directly to regular investors.
At the Times' request, crypto experts restructured some of the early transactions made by Trump's token buyers, and after first buyers began to abandon their holdings, they said $ I looked into how Trump prices crashed, then crashed, hurt and hurt. Other investors.
The analysis of Crypto Transaction Records was performed by forensic companies Nansen and Chainalysis, and Molly White, an independent cryptography researcher often critical of the industry. The data was then reviewed by the Times.
The big buyer pattern in this pattern is that it has been sold out since it was in Memecoin Holdings. A state regulator in New York recently warned consumers about these products, saying, “The creator or his companion artificially inflates the price of the coin, then inflates the price of the coin. At the price of the coin, They sell quickly and enjoy a significant profit while crashing prices.”
New York regulators called these operations “pump and dump schemes” and said they could leave buyers with big losses.
No evidence has been revealed that Trump or his associates have artificially inflated the price of the coin or engaged in insider trading. Asked about Trump's early deals and profits, the president's middle son, Eric Trump, declined to comment.
Starting gun
In the crypto world, all transactions are recorded in publicable ledgers known as blockchains. Usually, the names of the people who are doing the transaction remain hidden, with each account being identified only by a chain of long letters and numbers.
With blockchain, crypto analysts go back and look at new products, what each wallet did, when they first invested, when they transferred or sold out tokens, and the ultimate profit and losses are all playable You can decipher what is for. This analysis can also point out anomalies in the transaction that raise questions.
For example, blockchain records show that the $Trump Token was “created” at 9:01am Eastern time on January 17th, creating a so-called contract address. It was not announced for another 12 hours by Trump.
However, the account behind the first large public purchase (a bet of $1,096,109) was created about three hours before Trump began the coin. The night was filled with cryptocurrency, but it looked ready to hit new products.
The right timed trading, and the fact that wallet received funds just before Trump's coins were launched, quickly elicited skepticism from crypto analysts who speculated that traders were acting on insider information. I did.
In the crypto world, it is impossible to pinpoint the person behind trade. It is common for people to post big, sometimes unverified claims on social media before people suddenly disappear, making it difficult for amateur investors to distinguish legitimate investments from fraud.
This month, the X account claiming to represent Dubai-based Crypto Trader named Syed Sameer posted that he is the owner of the wallet that coordinated the first giant $1.1 million worth of trade.
Samia, who claimed to be a global Liberty Financial investor, was later accused of using insider information to enter early in the $Trump Token.
However, an investigation by the Times found a discrepancy between Samia's website and X account billing. After he faced these issues, Samia said in a message from the chat app Telegram that he actually has no control over the wallet.
Samia was lying about it, he said, “to be honest with you for your influence.” “I know it's stupid and childish, but yeah, I messed around.”
Lucky 31
The clearest thing based on Blockchain Records is that the person behind that $1.1 million trade is a big player among the horde of professional traders who buy quickly and then sell new Memecoins. issued.
According to an analysis of the transaction by Nansen's Aurelie Barthere, after making the purchase, the account owner quickly moved to sell the coins, generating at least $50 million in profits. White's review showed that total revenue increased its gross profit to $109 million.
Other massive $Trump deals are also attracting attention. This includes those by traders who started purchasing coins about two minutes after launch. Traders then sold these cards tokens within 30 minutes, with net profit of $2.7 million, as shown by the blockchain.
According to a trial by chain analysis, 700,000 wallets recorded profits on $ Trump. Nansen's analysis shows that early transactions were some of the most profitable.
But for all winners there were even more losers.
In the first 19 days of the transaction, a total of 813,294 wallets registered losses.
Losers – Those who paid more than they currently value for the token have accumulated $2 billion. Still, many of these traders hold tokens that will lose their money, as they may be hoping that prices will rise again, data shows.
The profits were enormous, primarily protected by nearby buyers. According to Chain Orisis, it is a total of $6.6 billion in cashed profits.
This is a familiar pattern for crypto traders. A few weeks before the launch of $Trump, some of the same wallets that bought the president's token also traded memo coins called Hawktoa, which were promoted by social media influencer Harry Welch.
Hawk Tuah Coin first introduced a market capitalization of $490 million in December, then collided with $10 million this week, leaving thousands of investors with losses and “creating a speculative frenzy.” He filed a lawsuit alleging that. Federal law that violated. (Welch said in X that he is “fully collaborative and committed to supporting legal teams representing the affected individuals.”
“This is similar to sports betting and gambling,” said Gareth Rhodes, former deputy director of the New York State Department of Financial Services, who is helping regulate the crypto industry and other financial services companies. . “Retail customers who put their money in risk losing most, if not all, of the expectation of a massive return.”
Sheelagh McNeill contributed to the research.
